Netcare Falls Most This Year in Johannesburg as U.K. Sales Dropby
South African healthcare provider declines to four-month low
Netcare sees more U.K. business from state-owned NHS
Netcare Ltd., a South African operator of private hospitals, fell the most since Dec. 10 after reporting a drop in revenue at its U.K. business.
Netcare declined 6.5 percent by the close in Johannesburg to 32.11 rand, the lowest since Jan. 27. About 12.3 million shares were traded, 2.2 times the three-month daily average.
First-half U.K. revenue fell 1.4 percent as a result of a change in the business mix toward the National Health Service, the U.K.’s state-funded health-care system, from private customers, the company said in a statement on Monday. South African sales gained 8.5 percent to 9.1 billion rand ($584 million).
“Bear in mind that last year was an election year in the U.K. so there was a lot of drive to bring down waiting lists,” Andre Bekker, an analyst at Avior Capital Markets, said by phone from London. “NHS patients come at lower tariffs for Netcare.”
While Netcare expects weakness in the South African economy, demand for private healthcare should remain resilient in the country and the Johannesburg-based company sees further improvement in occupancy levels.
“There was a big increase in capacity last year and that obviously will still put pressure on performance in the second half,” said Bekker, who has an underperform rating on the stock. “Once those new builds become profitable, they will in general be good for the group as a whole.”